It was announced yesterday that the founders of the GoPro (NYSE:GPRO) company Jill & Nick Woodman are to donate roughly 5.8 million shares from their own stake in GoPro (NYSE:GPRO), the beneficiary is the Nicholas & Jill Woodman Foundation.
The company shares have previously been under a lock-up restriction preventing the company’s founders from parting with shares for a certain amount of time after the company’s shares went public, this period is typically around 180 calendar days, Meaning that the GoPro shares should not have been sellable until 2015. However Woodmans agreed a deal with JPMorgan to break the lock-up.
Shares in the company have been rocketing since its Initial Public offering, rising by 177% in the period until today, however they have dropped off a cliff on early Thursday to the tune of 13%.
The company released a statement today stating that the husband and wife couple wished to give a personal gift to a newly established charity organisation in their name and acknowledged JPMorgan’s part in the action.
Break off represents about a quarter of the company’s total IPO, most of the shares came from Nick & Jill Woodman’s own holdings to the newly anointed Nicholas & Jill Woodman Foundation. In a statement the couple claimed they were grateful each morning they woke up for what life had provided them and were seeking to give something back.
It is believed there is incentive for the couple in the fact that the move has a handsome tax deductible caveat for the couple, and business analysts are unsure as to why this action was not taken by the couple at the time of the company’s IPO in June.
It is also claimed by analysts that the IPO market for tech companies is now going to be a graveyard at least until next year. There is every chance that this occurrence will cause investors to scurry from tech firms which have been previously exponentially tipped and which are floated currently.
The shares of GoPro will be sold as early as tomorrow. While the company has 126 million outstanding shares only 20.5 were part of the IPO with the rest being held by more investors who are unable to sell them until the 26th of December.
Investors have been alerted enough to dump their long positions on the company’s stock , and these recent developments might not be the only reasons for investors seeking to dump the stock. Concerns have been expressed about the steepness of its price rise recently. Jim Cramer claimed yesterday that the latest $20 rise in GoPro stock prices was due to short-sellers who were re-enforcing their position and was in no way due to fundamentals.
Citi analysts have proposed a theory that GoPro (NYSE:GPRO) will have to part with 20 million of its share units year on year in order to justify the current valuation. Estimates suggest that the company is only able to part with 12 million currently.
GoPro (NYSE:GPRO) is trading at 80.24 as of 12:43 ET It opened at 87.42 with a daily low of 79.13 and a high of 88.95 its 52 wk low is 28.65 and the 52 wk high is 96.45
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